Forex Trading Strategy Based on 50 Pip per Day
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An effective trading strategy is crucial for maximizing revenue in the trading of forex. A trading strategy is a collection of guidelines that dictate the exact moment to initiate and conclude a trade, taking into account specific circumstances in price fluctuation. It is widely accepted that a lack of planning often leads to failure, and this holds for forex trading as well.

There are numerous lucrative forex trading strategies available that can be utilized to achieve diverse trading outcomes. This article provides an exclusive trading strategy that aims to generate consistent profits of 50 pips per day. 

The ’50 pips a day forex strategy is a simple trading strategy that helps identify the direction of price movement at the beginning of a trading day without requiring extensive analysis and constant monitoring.

As the title suggests, this is a day trading strategy designed for the 1-hour timeframe, aiming to capture around 50% of the intraday volatility of the currency pair. 

The approach was formulated to engage in trading with the primary currency pairs, specifically the EURUSD and GBPUSD, although other currency pairs are also included. Executing this approach sets it apart from the majority of trading strategies as it does not necessitate the use of indicators to assess or ascertain the direction of price movements. 

Through the implementation of various indicators, this approach has consistently demonstrated its effectiveness in generating favorable outcomes for Forex pairs with a daily range of 100 pips or higher.

Fundamental Principles of the 50 Pips Forex Strategy

The Forex strategy of earning 50 pips per day is one of the most straightforward strategies available for use in the Forex market. To implement it, you need to adhere to a handful of detailed instructions, which include:

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  1. Place a candlestick with a duration of one hour at 7 am GMT on your chart. This time zone is ideal for implementing this strategy and taking full advantage of the daily fluctuations.
  1. After the 7 am GMT 1-hour candlestick concludes, it is advisable to set up two contrasting pending orders. The initial pending order is a purchase-stop order positioned two pips above the highest point. In comparison, the second order is a sell-stop order placed two pips below the lowest point.
  1. The value of the currency pair will shift towards one of the orders and trigger it. As soon as one of the orders is executed, it is essential to cancel the other one.
  1. When placing a buy order, it is advisable to set a stop-loss order around 5-10 pips below the low of the 7 am GMT candlestick. On the other hand, for a sell order, it is recommended to place a stop-loss order approximately 5-10 pips above the high of the 7 am GMT candlestick.
  1. Set a profit target of 50 pips.

The position will be closed automatically once the price of the asset reaches either the stop loss or take profit order. Nevertheless, there are instances where the price may not get any of these orders by the day’s end, prompting you to choose between closing it or extending its duration.

Advantages of This Trading Approach

  • The approach resembles a hands-off forex trading strategy. Once all the necessary preparations have been completed, further action is required on the following day. This dramatically decreases the amount of time you waste examining charts, analyzing price fluctuations, price formations, and news events using multiple tools and indicators.
  • Strategy does not necessitate the use of any indicator, eliminating the need for continuous monitoring to determine when to close your trade. Additionally, there is no need to search for the optimal setup, as it is readily available at 7 am GMT every trading day of the week.
  • The approach is excellent for significantly minimizing risk exposures due to its tight stop loss and the restriction of one setup per day, preventing traders from overtrading with the strategy.
  • The daily limit for opening trades or pending orders is determined by the number of forex pairs that the day trader is analyzing and that satisfy the criteria for executing the trading strategy. Thus, if a trader concentrates on two forex pairs, they will only manage a maximum of two trades in a single day.

Drawbacks of That Strategy

  • This approach offers just one opportunity throughout the entire trading day. Hence, if you prefer to have multiple intraday trade setups and trade different currency pairs with diverse movements and trading patterns, there may be a better strategy for your needs.
  • The profit goal of implementing this strategy is capped at a maximum of 50 pips per day, which is a conservative approach to day trading. While some forex trading strategies claim to offer higher profit targets in a single day, it is rare to find strategies that provide such a balanced combination of risk and returns.
  • Occasionally, your trades may result in a loss, and the strategy needs to present a chance to execute another trade.

Practices for Managing Risks

The Forex strategy of earning 50 pips per day is an incredibly uncomplicated approach with a straightforward arrangement that is effortless to adhere to. The approach has a history of steady profitability, but like any other forex trading strategy, there is also the possibility of incurring losses when using it.

Considering this, traders must adhere to stringent risk management practices like the ones listed below.

  • Ensure that you do not put at stake an amount that exceeds your financial capacity to bear potential losses
  • For those who are new to forex trading, it is advisable to limit your risk to no more than 2% of your trading account balance when using this particular strategy. Once you have become thoroughly acquainted with the approach over an extended duration, such as three months, and even as a seasoned expert. It is advisable to limit your trading equity risk to a maximum of 5%.
  • Utilizing the power of leverage in your trades can significantly amplify your potential gains, but it also comes with the risk of magnifying your losses. It is crucial to utilize a conservative amount of leverage, ensuring that it does not exceed 5% of your trading account’s equity.

Many brokers offer the option to trail a profitable trade using a trailing stop order. This feature serves as a safeguard for trades that are already profitable. It helps prevent potential losses in the event of unforeseen or anticipated market volatility or price reversals.

Whenever the price of the asset shifts in your favor, the trailing stop also adjusts, assisting you in safeguarding your gains and reducing potential losses.

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Nathan Boardman

By Nathan Boardman

Nathan Boardman, acclaimed Forex trader and author, specializes in market analysis, strategy development, and risk management. His insightful articles, published in Forex Profiles, empower readers to navigate the currency market successfully.

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